At the Junction of Summer and Fall
The Junction & Breakwater Trail delivers idyllic fall feels. Changing seasons, changing leaves, and a path scenic enough to get you thinking about your own path!
Hopefully you enjoyed time outside and stayed healthy during our most unpredictable summer ever. After a spring of quarantine, we were not exactly sure what to expect in the real estate world. I certainly never anticipated a summer like this one - and the dramatic increase in demand for beach real estate. In the wake of uncertainty, we saw our busiest summer ever, and we are still riding the wave of demand. I want to share the overall market trends to keep you updated.
So, what’s Trending?
The economic ‘Law of Supply and Demand’ is proven true, once again! Lewes and Delaware Beach communities are in overall high demand:
According to our in-house Gallo Realty analysis (based on the Bright Multiple Listing Service) as of the end of September, Sussex County saw a total of 1,011 homes on the market, a decrease of 11% from August. This puts inventory at slightly less than a 3-month's supply (quite low!) with 383 homes sold per month in 2020.
Sales of single-family homes are up 15% from last year, with 3,451 homes sold compared to 3,009 (for the first nine months of 2019). The largest increase is the Lewes/Rehoboth/Dewey area, up 33%, and the Georgetown area, up 28%.
And with this increase in sales and lower supply/higher demand, we are also seeing an increase in price. The average sales price of single-family homes in Sussex County is up over the first 9-month period of last year - $450,103 - compared to $408,181, a 10% increase. Pending sales in this time period are up 25% compared to last year, with 3,808 homes going under contract through September of 2020, compared to 3,048 in 2019. Also, average “days on market” figures have decreased by 8% over last year, from 104 days as of September 2019 to an average of 96 days on market in September 2020.
With this high-demand market, I have been involved in more multiple-offer situations this year than my other 36 years in the business combined. We had 9 offers on one listing this summer after being on the market three days! When two (or more) buyers are competing for the same house, invariably someone will be disappointed. Our goal is to help mitigate these situations for our clients, and try to make the resolution as easy as possible for all.
To do so, we recommend that every offer be as “clean” as possible with the fewest contingencies and the best/highest priced offer initially. Unfortunately, multiple offer scenarios offer little to no room for negotiation, so we help our buyers put their best feet forward from the start.
Some agents will recommend including an ‘escalation clause,’ which, as it sounds, essentially ups the buyer’s bid upon each counter offer up to a capped amount. This strategy is not without some drawbacks, so it is important to discuss your particular situation with your realtor.
Another idea in this competitive market is for buyers to appeal to sellers personally, in a letter with the contract, and describe what makes the house a perfect fit for them. I have had several clients write these letters recently, and it was a moving reminder that the ‘business’ of buying and selling a property is often the most personal purchase one can make - choosing a home.
A common question I’ve been getting these days is, “Where are all of the people coming from?” National news articles have speculated that people are moving out of cities in record numbers, especially after a spring of confinement in apartment buildings or in more densely populated areas with less room to roam. Anecdotally, we have seen quite a few new clients from cities, as well as people from suburban areas that realize they can work from anywhere. Why not make it the beach?
But not all of our buyers are entirely new to the area. We have worked with many local Lewes neighbors who are looking for larger homes (maybe after spending so much ‘quality time’ with family?!), and homes with home offices and areas for everyone to be at home, together.
As all of us likely spent more time at home last year than ever before, and we continue to do so, the need for our homes to be true havens has become even more clear. If you have been considering selling your home, upsizing to a larger house, or downsizing to simplify, the past six months have definitely been a catalyst for change.
We would welcome the opportunity to talk with you about your real estate questions. Most of all, we wish you a safe and healthy holiday season!
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